Diageo aims to topple Pernod Ricard from top slot in China

27 August, 2008

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Johnnie Walker has its sights set on stealing the top spot in China's Scotch whisky market from Chivas Regal.

Diageo chief executive Paul Walsh claimed Johnnie Walker had closed the market share gap on its Pernod Ricard-owned rival by 6 per cent, with growth in net sales of 61 per cent for Black Label in the year to the end of June.

Pernod Ricard's estimates for the same period put Chivas Regal growth at between 10 and 20 per cent and managing director Pierre Pringuet recently admitted a slowdown towards the end of the year, following some 50 per cent growth in 2005/6.

Diageo has also closed the gap in Thailand, where Chivas reported a "significant decline" on the back of the country's political problems.

Diageo claimed its whisky sales in Thailand were up 4 per cent by volume and 21 per cent by value over the year.

Walsh said: "We intend to be number one in China one day. I don't know when that will be, but we continue to close the gap. In all the other emerging markets we are number one.

"We have been progressively investing more in Asia Pacific in the past few years. This is going to be a high growth region for us."

Pringuet said Chivas Regal continued to see strong growth in Malaysia, Vietnam, Singapore and Indonesia.

He said: "You could say we created the whisky market in China with Chivas. There is certainly a slow decline of the rate of growth. It's difficult to say what the reason is, but it could be that we had a geographical expansion in China [in recent years] covering large cities and eventually you have to stop that. "

The opening last month of a £12 million bottling line at Diageo's Shieldhall plant completes the £100 million investment package in its Scotch whisky businesses.